Residents - British Citizens with Overseas Income

People who are both domiciled and usually resident in the UK are liable to UK tax on their income wherever it may arise. There are slight differences for those who are only temporarily resident in the UK.

Where foreign tax is paid on income arising in another country there is relief available of either the amount of tax paid abroad or the tax due in the UK, whichever is higher.

In particular many people do not realise that self-employed income earned abroad is taxable in the UK if they are considered to be resident in the UK. Determining where someone is resident is complex, it is necessary to look at both the number of days spent in the UK in the tax year and also the average over the previous few years.

Pension income from abroad is subject to a 10% deduction, except for Commonwealth and Irish citizens domiciled in the UK, when only the pension remitted to the UK is taxable.

Employment income is taxable in the UK even if the duties are performed abroad, although this is restricted to the amount brought in to the UK for those not normally resident in the UK.

Investment income from abroad is taxable in the UK, except for Commonwealth and Irish citizens domiciled in the UK, when only the income remitted to the UK is taxable.

Hornbeam can advise on your residence position, the liability to UK tax of income arising outside the UK, and of course prepare your UK tax return.